Make It Large

The ground handling market is consolidating with the major players, maneuvering frantically to ensure their share of the spoils.

The Hermetic philosophy of ‘as above, so below’ can be readily applied to the aviation industry. Because just as the airlines are moving ponderously toward consolidation, slowly demolishing outdated bilateral rules and ownership issues, the ground handling market too is witnessing a
coming together.

The same principles are driving both: economies of scale, global reach and growth potential among them. But to what extent the ground handling market will be united remains to be seen.

Swissport International Ltd., which is owned by Ferrovial and is active at 184 airports in 43 countries on five continents, believes consolidation will happen but doesn’t necessarily discount the future role of local enterprises. “We will see both developments in parallel,” says a spokesperson.
“External banks and merger and acquisition experts are predicting a consolidation on a global level of between three to four players maximum. Beside this you will find some regional providers covering their respective markets and, of course, we will always see hundreds of smaller, local players with their local expertise. The ground handling market was always highly fragmented.”

International spread
That fragmentation is eroding, however. Perhaps the best example of this is Dnata’s growing empire. Now almost 50 years old, Dnata has split into three business areas: Dnata Airport Operations, Dnata Cargo and Dnata Travel Services.

Dnata Airport Operations is obviously best known for its ground and passenger handling services at Dubai International Airport but has quietly expanded its international reach and now has services at 16 airports in seven countries — Singapore, Switzerland, Philippines, Australia, Pakistan, China and the United Arab Emirates.

The most recent acquisition is Jet Handling AG, the airport handling division of Swiss-based Jet Aviation Group. The agreement was signed in November 2007 and was the third deal of the year following joint ventures in Australia and China.

“We were attracted by Jet Aviation Handling’s reputation as a first-class, quality handling agent, one of the best in Europe,” explains Stewart Angus, divisional senior vice president, Associated Companies, Dnata. “It has an excellent management team, sets itself very high standards and has a strong customer base. As such, this fits in perfectly with our strategy of building a network of high-caliber operations in different countries.”

Jet Handling operates from Zurich and Geneva and its 60-strong client base includes British Airways, Emirates, Etihad and Air Berlin. More than 1,000 staff across the two airports offer a comprehensive package such as passenger services, communications, cargo and station control.

The sale means the group will now be able to concentrate on its core activities in the private and business aviation sector — the FBO operations are not part of the deal but rather will remain with the Jet Aviation Group.

Urs Zorn, senior vice president and general manager of Jet Aviation Handling AG, said in a statement, “Our management and the employees enjoy the full confidence of the new shareholder and Dnata is eager to work with the current management team. Within the next few months, we will change Jet Aviation Handling AG’s corporate name so that we will be fully integrated into the Dnata group.”

A need for flexibility
Angus underscores Dnata’s intent but stresses there are no plans for any changes in Jet Handling’s set-up. “We acquired Jet Aviation Handling because it was already a very good company,” he says. “We have every confidence in the management team and their staff — we see no reason to change that. Of course, we will be working with the local management team to identify how we can assist them to develop their business further, but beyond that, we will not be making any significant changes.”

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